MGN Insight – History in the making
Formica is one of those instantly recognisable brand names – but one that has had a somewhat up-and-down history. Over the course of the 105 years of its existence, it has seen highs and lows in fortunes, in image and in fashion.
But the strength of the brand name has endured and the company has survived and today a new, modern, forward-thinking business, producing high quality products has emerged that is successfully supplying markets across the globe.
You’ll see Formica products in all kinds of places today, not only on kitchen worktops but in schools and in airport lounges too and even on the outside of high-rise buildings as cladding (its fire-retardant cladding products are in high demand post-Grenfell of course).
The headquarters of Formica’s European operation is in North Shields, where the company has had a site since the 1940s, and is one of two sites in the North East, the other being in Newton Aycliffe.
Formica is a long-standing member of the Manufacturing Growth Network (MGN) and was placed 2nd in the Apprenticeship league tables released this week in Insider Media.
Insider’s Philip Cunliffe spoke to Formica’s chief operating officer for Europe, Paul Foreman, about the re-introduction of their apprenticeship scheme.
Paul explained how the operation works. “In the UK we sell to a network of distributors and then from there the products are sold into fabrication sub-distributors before being sent on to wherever the laminates are being installed. We have two different channels: commercial and residential. We sell worktops through our distribution partners into kitchen studios and we also sell laminate into the distributors who are stocking are feeding the products into fabricators. So, this is our distribution model across Europe.”
There are five businesses across the Formica Group, each selling into different markets around the world. The North East sites, service the European market, as well as Southern and Northern Africa and certain parts of the Middle East. In terms of exports, a little over 40 per cent of products are exported.
Paul continued: “The site here in North Shields is really important because we manufacture all the sheet sizes and all the technical products too. R&D is mainly centred in the US but we also have a team who work on this here and we have a technical lab in which we make samples and pressings. Our laminate is made to a high quality standard and of course there are imitations out there but our range, portfolio and service offering to the market is really critical to the business. And of course the speed of delivery is really important for our customers.”
There have been a number different owners of the business over the years, reflecting its changing fortunes but Formica’s current owners – Fletcher Building – has placed big faith in the competitiveness of the European business by investing £40m in facilities and in people at the North Shields site. This is split between capital expenditure on new machinery and in staff training, all of which is set to be completed by the end of 2018.
There are around 1,000 people employed across the four European sites, with about half of these in the North East. As Formica is the only laminate manufacturer in the UK, the skillsets it needs are fairly bespoke and, according to Paul Foreman, the workforce “is incredibly knowledgeable about the processes and systems it has in place, as well as all the technical issues that go into making the products and are therefore a key contributor to our success.
“It’s a very hands-on job they are doing so they need to know what they’re doing, so there’s a high level of skill here. We’ve therefore got a lot of people here who have been with the business all their working lives, many having started out as apprentices.”
Having abandoned the Apprenticeship scheme some years ago, Paul reintroduced it just over 12 months ago and explained why: “We have a maintenance team of about 45 people and, as there were few people about to retire, we thought it right to get some apprentices in, and we’ve also introduced some into the engineering area of the business.
“It was actually a suggestion by the employees that we re-introduce the Apprenticeship scheme and it’s been really good to have done so. Not only has it bolstered the team, it’s also brought in different types of skillsets to the business. So it’s been really well received and we’re now looking at it from a broader perspective as well, looking to bring apprentices into the supply chain team next year.
“We had good level of applications when we’ve been recruiting our apprentices. Interestingly we had one of our employees drop out of their role to become an apprentice.”
The investment in the North East doesn’t stop with the staff; there is also a significant upgrading of machinery taking place, as Paul Foreman described: “There are three different processes in the production of laminate: treating, pressing and finishing processes. Some of our pressing assets are very old, so we’re investing in some incredible new modern assets. The investment is pitched at growth and efficiencies.”
The investment will enable the business to drive innovation, increase production and improve operational performance. It will also see the fortunes of Formica – a company with a long and proud tradition of manufacturing in the North East – to continue on its upward curve.
The Manufacturing Growth Network (MGN) is a quarterly publication sponsored by NRG, EY, Square One Law, Lloyds Bank and EEF and published by Insider Media. MGN is FREE for North East manufacturing businesses to join, for further information on how your business can get involved contact Julie Mordue, client relationship manager at NRG.